Splitting IRA on death of owner
Owner had eight designated beneficiaries. Anyone have an idea on how to get around the administrative nightmare of trying split the bond porion of the portfolio eight different ways?
Owner had eight designated beneficiaries. Anyone have an idea on how to get around the administrative nightmare of trying split the bond porion of the portfolio eight different ways?
Permalink Submitted by Alan Spross on Thu, 2012-09-13 18:36
Apparently these are not bond funds which could be split into fractional shares. If they are individual bonds, some cash must be raised in the account to bring each beneficiary share to an equal amount. There may also be specific policies of the IRA custodian that influence how this is best done.
There are additional bookeeping issues if the owner’s year of death RMD has not been satisfied. With 8 beneficiaries there is bound to be a couple who either cash out their share of take a much larger distribution than their RMD. Any year of death RMD can be satisfied by any beneficiary or in any combination, and that ties into potential bookeeping issues.
Permalink Submitted by Donald L Born on Thu, 2012-09-13 18:43
Thanks, we did luck out in that the RMD was met prior to death. Will check with custodian to see if they have policies controlling.